Taxation of trust

The taxation of  a trust is governed by section 11,12 & 13 of the Income Tax Act.

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Since its income is generally exempt from the tax due to its CHARITABLE PURPOSE hence  if 85% of its income is "applied" towards the object for which it is being run then the whole income is tax free hence no question of any exemption limit.

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For example; if Total Receipts are Rs. 10 crores...and "application of income" i.e. incurring expenses and acquisition of assets are more than 8.5 crores; then the tax is not required to be paid.

85% of income shall be applied before 5 years otherwise it will be taxable

There is no basic exemption to the taxable income. If it is a charitable trust, exemptions available u/s 11 (1) (a) and  Explanation 2 to section 11 (1) and also Section 11 (2) can be availed. 

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CA SURENDRA KUMAR RAKHECHA 
Thanks for giving solution,and you mean exemption is allowed 15% indirectly is it correct or not...?